My small business clients give me skeptical looks. I imagine that they are thinking “do I really need to worry about that?” or “my people will never sue me, they love me.” I love these looks because they show that my clients are balancing risk. They are weighing whether they need to worry about compliance (i.e. spend money on an attorney) against whether their failure to be 100 percent compliant will ever rear its ugly (and expensive) head. I knock on wood with them that the ugly head will remain hidden while preparing for the worst.
No one likes to prepare for the worst, but often we have to. For employers, the worst includes a lawsuit brought by an employee or an investigation by a government agency. Preparing for the worst includes spending just enough to be compliant and protect the business and its number one asset, employees. So, for even modest resources, employers need to start somewhere to protect themselves. Here’s what to start with:
- An employee handbook. Every employment lawyer will tell you that the employee handbook is one of the most important documents in any employment or labor law dispute. It is always an exhibit to a deposition. Besides its litigation importance, the handbook contains the most important policy that every employer must have – the harassment policy. The handbook also describes the work culture both good and bad and sets employee expectations. It is an essential document no matter what type of business you’re in.
- Manager training. As I’ve said before, managers need to know enough. They need to know what their role is, what their responsibilities are, what’s in the handbook, and when they need help. For the smallest companies (under 10 employees), this training doesn’t need to take more than two hours, but it should happen. There are too many new laws (even the “blacklisting” kind) that could stop a small business from doing business if managers don’t know what they are doing.
- Performance management. I know, performance management is a huge topic. At its core, performance management is simply setting expectations and holding employees accountable. Large organizations spend millions on fancy apps and software, develop multi-step processes to bring automation and consistency to setting expectations. Small businesses don’t need to do all that. When you’re small, you can be more informal. Set expectations, communicate those expectations, and measure employees against them. Eventually, you may need to terminate someone for poor performance and if you haven’t set and communicated expectations, you expose your business to more scrutiny, including the lawsuit kind.
Of course, employers need to worry about I-9s, personnel files, proper classification of employees, sick leave requirements, and many, many other things. But if we have to start somewhere, these three can protect an employer from many risks. As business takes off, we can dig into all of those other areas.
By the way, my response to the looks is to be as straightforward as I can. “I’ll help you worry a bit less,” and “Of course they love you, but everyone hires someone who could sue them eventually.” I promise.